The Step2 Company, LLC (Step2) is the largest American manufacturer of preschool and toddler toys and the world's largest rotational molder of plastics. Their product line includes swing sets, art desks & easels, playhouses, play kitchens, slides, ride-on wagons, basketball hoops, picnic tables, and children’s beds. Their products are available for direct-consumer purchase through their online catalog and big box retailers such as Kohls, Amazon, and Target.
Step2 had recently violated the terms set forth by its financial covenant. Its lender sought services from a financial advisory firm to determine if a forbearance agreement and replacement financing would be required.
Performed financial analysis on both the Company’s prior year financial statements and the Company’s 13-week cash flow.
Completed a detail review and analysis of the Company’s SKU level finished goods and component inventory.
Analyzed current inventory balances at different month-ends and compared the balances to the SKU level inventory demand reports.
Identified potential slow moving inventory for upcoming quarters.
Reviewed and monitored the Company’s weekly performance against the forbearance budget.
Issued weekly summary reports to the senior lender and counsel.
As financial advisor to the lender, we assisted in the negotiations of a forbearance agreement with Step2. Prior to the expiration of the forbearance agreement, Step2 was able to refinance their loan with another lender, providing its current lender with a 100-percent recovery.